I mean, that's called having "work friends". You hang out at work, maybe grab a beer together sometimes, help each other out professionally, but they typically don't enter into the rest of your life. This is extremely common.

Also, it really isn't hard to be a manager to your friends if both people have any level of emotional intelligence. A good manager's job is to support their subordinates, enable their growth, and shelter them from belligerent demands of uninformed clients or higher-ups.